Living on a Budget

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Check out these websites for ways to swap items and find deals for group purchases.

by Jeff Yeager, Updated April 2011|Comments: 0

Frugality: bringing people together one penny at a time.

I'm thinking about having that slogan printed on T-shirts or bumper stickers or something, because it's really true. The Great Recession is prompting more and more people to economize and, in the process, they're looking to their friends, neighbors and communities for help in doing so.

Could it be that a silver lining of these tough economic times will be a return of the good old-fashioned ideals of better living by sharing and building stronger communities? There are a lot of examples — from old school to high tech — of how the recession is pulling people together in an attempt to economize and weather tough times. Consider:

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Community Gardens: Backyard vegetable gardens are on the rise (up nearly 20 percent last year alone, according to the National Gardening Association), and so are community gardens, where neighbors plant and maintain their crops on a common plot of land. Not only do they share the gardening space, but at many community gardens they also share tools, seeds and plants, and their own labor as well. The American Community Garden Association estimates that there are now more than 18,000 community gardens throughout the U.S. and Canada. The group's website (communitygarden.org) provides a nationwide directory of community gardens and information on how to start one of your own if there's not already a community garden near you. And if you don't have a green thumb, consider banding together with other horticulturally challenged folks and buying a CSA (Community Supported Agriculture) share (see localharvest.org). You'll get a portion of the fresh harvest every week from a local farm and help out the farmer and local economy in the process.

Sharing Transportation: Why pay to own a whole car when you use it only part of the time? That's what more and more Americans are asking themselves, and why "car sharing" companies are becoming more popular. Last year Zipcar (Zipcar.com), a leader in the relatively new U.S. car-sharing industry, reported a 70 percent increase in membership since the start of the recession. Car-share members pay a nominal annual fee for 24/7 access to a fleet of cars parked around the country. Make a reservation by phone or online (last minute is fine), and use an electronic key card to access the car you want. Hourly fees and per-mile rates apply, but all of the hassles and other costs of car ownership — including gas, insurance, maintenance, parking, registration, taxes, etc. — are the company's responsibility. More evidence of cost-sharing: The U.S. Census reports that both carpooling and the use of public transportation have become increasingly popular since the start of the recession.

Share Your Time, Tools and Toys: Lend your skills or just a helping hand, and get the favor returned next time you need some help. "Time banks" are increasingly popular in local communities and on the Internet. Websites like timebanks.org and favorpals.com let you trade your time — doing anything from housecleaning to walking dogs to filing someone's tax returns, depending on your expertise and interests — and receive credits in return, which can be redeemed for the services of other time bank members when you need them. The website DaveZillion.com specializes in helping people share their time, expertise and even power tools to get home remodeling and repair jobs done on the cheap. And even lending libraries for children's toys — a popular social institution in many other countries — are starting to catch on here in the U.S. Contact the USA Toy Library Association (USATLA.org) for a directory and more information.

Groupons and Daily Deal Websites: And finally, the popular website Groupon (Groupon.com) is bringing everyone from boomers to Gen Z'ers together to save a buck. Group members share daily deals and Groupon negotiates special discounts that kick in when enough people take advantage of them, so it's all about collective strength and action. Discount vouchers (aka "Groupons") can be printed off the website or presented to the participating businesses on your mobile device. Register in different cities when you travel in order to take advantage of local bargains. Other companies with these daily coupon deals include LivingSocial (livingsocial.com) and DailyDeals (dailydeals.com). Groupons have become such a social phenomenon that 28-year-old Josh Stevens has earned the title "Groupawn," and he is currently traveling the country attempting to live off Groupon deals (and the kindness of fellow Groupon community members) for an entire year, without spending any money. If Josh goes the distance without spending a dime, he's a shoe-in for my Cheapskate Hall of Fame.

IRS: Four Facts About Bartering

Here are four facts about bartering that the IRS wants small business owners to be aware of:

1. Barter Exchange A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and services among themselves. Whether this activity operates out of a physical office or is internet based, a barter exchange is generally required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, annually to their clients or members and to the IRS.

2. Barter Income Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter - barter for another’s products or services - you will have to report the fair market value of the products or services you received on your tax return.

3. Taxes Income from bartering is taxable in the year it is performed. Bartering may result in liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss.

4. Reporting The rules for reporting barter transactions may vary depending on which form of bartering takes place. Generally, you report this type of business income on Form 1040, Schedule C Profit or Loss from Business, or other business returns such as Form 1065 for Partnerships, Form 1120 for Corporations, or Form 1120-S for Small Business Corporations.